Just What the Patient Ordered? Direct-to-Consumer Advertising and the Demand for Pharmaceutical Products

Abstract

Three out of four patients who ask a physician for a drug get it prescribed. Do patients really wield so much influence? Empirical analysis of patient-level prescription claims reveals that direct-to-consumer advertising does impact the choice probability but there are two caveats. First, the impact of promotions aimed directly at physicians is significantly higher. Consequently, advertising affects the treatment probability benefiting all competing brands. Second, advertising infleunces demand only for drugs that have preferential status with the patient's insurer. The high ratio of fulfilled drug requests is driven less by patient's influence than physician's existing preference for these drugs.

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